What is the benchmark oil price for international crude oil price?
What is the international crude oil price based on?The international crude oil market pricing is based on the standard oil of major oil producing areas in the world. For example, in the New York Futures Exchange, its crude oil futures are based on the "intermediate base crude oil (WTI)" produced in West Texas of the United States. All crude oil produced in the United States or sold to the United States is priced with light and low sulfur WTI as the reference oil.
Because of the strength of the U.S. as a super buyer of crude oil and the influence of the New York Futures Exchange, the trading of crude oil futures with WTI as the benchmark oil has become the leading trading volume in the global commodity futures. Generally speaking, the crude oil futures contract has good liquidity and high price transparency, which is one of the three benchmark prices in the world crude oil market. When the public and the media usually talk about how much the oil price breaks through, they mainly refer to this price.
However, more than two thirds of the world's crude oil trading volume is not based on WTI, but on Brent crude oil from the North Sea, which is also light and low sulfur. On June 23, 1988, London International Petroleum Exchange (IPE) launched Brent crude oil futures contracts, including northwest Europe, the North Sea, the Mediterranean, Africa and Yemen and other countries and regions, all of which are based on this. Because this futures contract meets the needs of the oil industry, it is regarded as a "highly flexible tool for risk aversion and trading", and also ranks among the international crude oil prices Three benchmarks.
As a result, London has become one of the three major international crude oil futures trading centers. The Brent crude oil pricing system composed of Brent crude oil futures and spot market covers 80% of the world's crude oil trading volume at most. Even today, the price of crude oil in New York is becoming increasingly important, about 65% of the global crude oil trading volume is based on the North Sea Brent crude oil.